In the latest chapter of the Dubai assassination drama, Britain gave the boot Tuesday to an Israeli diplomat, asserting that Israel was involved in the forgery of U.K. passports used in the January killing of a senior Hamas operative.

Odd, for a business that’s supposed to stay out of the news. Then again, that’s been the fate of spy services in recent years. A lot of what they do, from espionage and bribery to counterterrorism and hacking into computers, has ended up on the front page.

So it was in London Tuesday, when Her Majesty’s Government concluded “there are compelling reasons to believe that Israel was responsible for the misuse of the British passports,” in the words of Foreign Secretary David Miliband.

As a consequence, Britain ordered the expulsion of an unidentified Israeli diplomat after concluding that the high-quality fakes used in the Dubai hit were almost certainly “made by a state intelligence service.”

“The actions in this case are completely unacceptable,” Miliband said, “and they must stop.”

Spy flaps are to foreign relations as insider trading is to Wall Street – mother’s milk, sometimes spilled. And, like every other secret service, Israel’s Mossad is not going to stop doing what it was designed for — to neutralize its enemies with whatever it takes, from car bombs and silencer-equipped pistols to – in the latest flap – muscle relaxants and a pillow, allegedly the weapons of choice against the Hamas military commander in Dubai. Mahmoud al-Mabhouh was wanted by Israel for his role in the slayings of two of its soldiers in the 1980s.

But another of Mossad’s reason for being, as with all the world’s spy services, is to make sure friends are really friends.

And judging by once sensitive FBI documents making the rounds in recent days, the Israelis have been at this task in Washington for a very long time.

The 21 documents, obtained by Grant F. Smith, a Washington, D.C. author who has made a career out of writing critical books on Israeli spying and lobbying, detail the FBI’s investigation into the theft of a confidential U.S. document on the Reagan administration’s position going into the 1984 U.S.-Israel Free Trade Area Negotiations.

Acting on a complaint that the document was circulating on Capitol Hill, the FBI discovered that an Israeli diplomat had acquired the paper and given it to officials at AIPAC, the lobbying group whose annual convention drew both Netanyahu and Secretary of State Hillary Rodham Clinton this week.

Although the document was classified only “confidential” (as opposed to Secret, Top Secret and higher), the FBI concluded that President Reagan’s “negotiating position concerning a trade agreement between the United States and the State of Israel is compromised because this report divulges those products and industries that have been identified by the International Trade Commission as being the most sensitive to imports from Israel.”

U.S. trade officials were furious at the discovery, “most angered by the fact that the American-Israel Public Affairs Committee (AIPAC) had apparently attempted to influence members of Congress with the use of a purloined copy of the ITC report and had usurped their authority,” the FBI reported at the time.

Its investigation quickly hit a brick wall, however, when the Israeli embassy official who handled the stolen goods, identified as then-Minister of Economics Dan Halpern by Grant Smith in his 2009 book “Spy Trade,” claimed diplomatic immunity.

“He indicated that he received this information in his official capacity as a diplomat, and that it would be against the principals of diplomatic work to divulge any information pertaining to the identity of the individual who provided him the report,” the FBI reported.

Because the man claimed diplomatic immunity,”active investigation into this matter will be discontinued at WFO [Washington Field Office],” the FBI said. “Washington Field will be contacted by the USTR or the ITC if pertinent information is developed regarding this or similar incidents.”

In his March 13, 1986 interview with the FBI, Halpern said “he received this information in his official capacity as a diplomat and that it would be against the principles of diplomatic work to divulge any information on the identity of the individual who gave him the report.”

In any event, he told the agents, the report was all over town, and that “the Government of Israel did not ask to receive the report and stated that when the individual provided him with the report, the transaction was not conducted in a discreet or secretive manner.”

Halpern is now on the executive committee of the America-Israel Chamber of Commerce in New York and the co-CEO of Iftic, a private business consultancy, according to his listing there.

But the trade-spy flap was small potatoes compared the arrest 18 months later of Jonathan Pollard, the naval intelligence analyst who passed upwards of a million pages of classified documents to his Israeli handlers, according to court documents. Under a 1987 plea agreement, Pollard is serving a life sentence.

Since then, Israeli intelligence operations here have hardly slowed. In 2005, U.S. counterspies overheard Rep. Jane Harman, D-Calif., agreeing to help a suspected Israeli agent lobby the Justice Department to reduce espionage-related charges against two former AIPAC officials. Harman denied my account in Congressional Quarterly, which was subsequently corroborated by major news organizations.

Back in London, meanwhile, British Foreign Secretary Miliband asserted Tuesday that “trust between [Israel and the U.K.] had been badly dented” by the Dubai passport caper and “demanded formal assurances it never happen again.”

Former Mossad agent Gad Shimron, interviewed in London by The Washington Post’s Karla Adam, said Israel would never officially admit any involvement in the killing of Mahmoud al-Mabhouh in Dubai.

But Shimron added: “the British are hypocrites, because when they operate against al-Qaeda, they do not do it with genuine passports.”

In the snooper’s state of East Germany, the Stasi secret police employed one informer for every 6.5 citizens. Its agents monitored every aspect of daily life, from pub chat and workplace banter to (in some notorious cases) the pillow talk of couples who consisted of one official snitch and one innocent partner. This vast “internal army” of shadows knew your visitors, and knew who you telephoned. It knew your favourite books, and your favourite beer.

In the snooper’s state of East Germany, the Stasi secret police employed one informer for every 6.5 citizens. Its agents monitored every aspect of daily life, from pub chat and workplace banter to (in some notorious cases) the pillow talk of couples who consisted of one official snitch and one innocent partner. This vast “internal army” of shadows knew your visitors, and knew who you telephoned. It knew your favourite books, and your favourite beer.

“Laid out upright and end to end,” reports Stasiland, a first book which this week won the Australian writer Anna Funder the £30,000 BBC4 Samuel Johnson prize, “the files the Stasi kept on their countrymen would form a line 180km long.” In its abandoned Leipzig offices, Funder even came across the “smell samples” of underpants that the Stasi used – or at least pretended to use – in order to trail and identify dissidents with the aid of sniffer dogs. Repression, in Stasiland, had a most peculiar stink.

“The Stasi wanted to control every aspect of society,” says Funder, who, after six previous appearances on literary prize shortlists, but no victories, flew in from her home city of Sydney for Tuesday’s ceremony more in hope than expectation. Interviewed the day after her win, Funder says: “If you belonged to the Stasi you couldn’t have any contact with Westerners. If you had relatives in the West – bad luck. By the same token, if you had an affair, that was an exercise in having a private life, a realm separate from the Stasi, and they couldn’t bear it.”

It was in Leipzig that she heard the story of Miriam Weber, the book’s most consistently heroic witness. Miriam made a madly courageous teenage attempt to scale the Wall; her husband died on remand in a Stasi cell; and her brave, blighted life unfolded in the shadow of its surveillance. Still, after 15 years of relative freedom, the nightmare continues.

“I’m in contact with Miriam,” Funder says. “She works in a public organisation that also employs former Stasi informers as her bosses. So they know her history as, effectively, a political prisoner, and she knows that they were informers. These people are still living and working cheek by jowl, without much resolution.”

Other stories in Stasiland tell of an everyday heroism still unrewarded, and often unacknowledged. Sigrid Paul, for instance, secretly sent her sick baby across the Wall for the treatment that would save his life. She spent five years in an East German prison after she refused to betray her accomplice – when betrayal, so the Stasi had promised, would have meant reunion with her son.

The people of the GDR lived through their own private Nineteen Eighty-Four every single day. Funder describes Orwell’s book as “like a manual for the GDR, right down to the most incredible detail”. The party, if not the proles, knew that very well. She remembers that the much-dreaded Stasi chief Erich Mielke even managed to renumber the offices in the secret-service headquarters. “His office was on the second floor, so all the office numbers started with ‘2’. Orwell was banned in the GDR, but he would have had access to it. Because he so wanted the room number to be 101, he had the entire first floor renamed the mezzanine, and so his office was Room 101.”